Social housing communities have been an intrinsic part of British Society since the dawn of the industrial revolution: these communities have allowed the working class access to safe, liveable, and affordable homes. Essentially – evening out the playing field for those seeking housing by providing homes to those who require the spaces but can not afford them in the private sector.
However, Council tenants reside in a system in which they paid for subsidized housing whilst never actually owning the homes in which they lived. Leaving them little room for monetary growth and home improvement because the reality is: tenants do not own property, there is no way for them to make money off of their homes if they do not own them.
Noting the misfortunate circumstances in which many council tenants found themselves in – former British PM Margaret Thatcher sought to enable tenants of Social Housing communities to acquire real estate assets, which they could call their own. Rather than paying rent which over time results in a net loss of income, tenants who were typically already in modest financial circumstances would have the opportunity to acquire the ownership of a home via discounted home pricing. Right to Buy meant that council housing residents could aspire to have something to have that wasn’t given to them by the state, rather – acquired by their own work and wealth. Unlike tenancy, home ownership for council residents meant they could pass resources to their children, and have a foundation of financial stability in their lives.
However, what seemed to be an unquestionably good-intentioned policy during the widespread popularity of Thatcherism – had plenty of loopholes – which, to say the least, raise suspicion.
Since municipal governments were the owners and providers of council homes to tenants of their jurisdiction, the discounted rates for council housing sales meant the government was selling a societal asset for a profit. Council homes were sold to tenants at prices ranging from 33 to 70 percent below market value; meaning former council apartment of the same size would sell for far less than that of a non-former counsel flat. Another obstacle sellers of former council homes encounter are the often-negative connotations of council housing in the UK. The purchases of council homes from non-counselees and private buyers enabled gentrification of many areas once filled with council homes and generally lower socioeconomic status.
London has seen dramatic shifts in its neighborhoods property value through the past decade. Areas once crime ridden like Hackney (also previously filled with council homes) are now experiencing an influx of young professionals whose demand and purchasing power outweighs those of lower income, many of whom live in council homes. Right to buy fuels the gentrification of areas like Hackney because of this conversion of public assets into private assets, which occurs when counselees purchase their own apartments and become homeowners. Because of the increased demand in areas like Hackney, rents and property taxes also rise, pushing lesser earning individuals to sell their devalued homes and move outside of Central London and into the suburbs, however the number of council homes to accommodate this migratory pattern is not yet in place or reflective of the changing times.
The extension of the right to buy effectively creates new barriers for UK citizens to access council housing. The Queens’ annual address in the House of Lords this past spring set the stage for the Conservative party’s political manifesto, including their plans to extend the right to buy act and add new clauses to it; ushering in a few seemingly small, yet impactful changes. The government announced their intention to decrease the benefit caps from 26,000 pounds to 23,000; and to remove housing benefits from 18 to 21 year olds – leaving many without money and financial security they previously owned the rights to. The reduction of benefit caps is apparently the conservative party’s attempt to push young people to “earn or learn” yet taking away financial resources from the country’s youth is not something one would think to positive growth amongst the growing demographic of young students and professionals. Only time will tell what changes this policy will bring in the future, as its impact has already been felt by the nations real estate market, its apparently now time for the students of the UK to bear a cost at the hands of this scheme.